Archives for April 29, 2016

Sunstone Closes First Fund

by

Sunstone Partners has closed its first fund, Sunstone Partners I, LP, with $300 million of total commitments. The new fund had a target of $200 million, was oversubscribed, and closed at its hard cap.

Sunstone Partners was formed by a spin-out of the growth equity team of Trident Capital and the firm was initially known as TC Growth Partners. The co-founders of Sunstone – Gustavo Alberelli, Michael Biggee, Arneek Multani, and John Moragne – have over 60 years of cumulative investment experience, largely through their time at Trident, and have together led 46 individual investments.

Limited partners in Fund I include the usual mix of university endowments, corporate pension plans, foundations, insurance companies, investment advisors, state and government retirement systems and family offices. Sunstone did not use a placement agent to assist with fundraising.

Sunstone Partners makes growth equity investments and majority recapitalizations and buyouts of technology-enabled services businesses. Typical targets will have annual revenues of at least $10 million and will be operating at a breakeven or profitable level. Sectors of interest include healthcare IT; Internet and marketing services; cloud and enterprise IT; and cybersecurity. Equity investments range from $15 million to $75 million. Sunstone is headquartered in Palo Alto (www.sunstonepartners.com).

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-29-16

CIVC Acquires Sitewise

by

Track Utilities, a portfolio company of CIVC Partners, has acquired Sitewise Corporation, a provider of compliance related operations and maintenance; re-construction; and new construction services to oil, natural gas, electric, and telecom companies.

The Sitewise’ management team is led by Lee Wilkerson, President; Jeff Sedillos, VP of Operations; and Myron Stadler, VP of Finance. At closing, each of these senior managers became shareholders of Track Utilities. Sitewise is headquartered in Denver and has four additional Colorado-based offices (www.sitewisecorp.com).

Track Utilities, acquired by CIVC in 2014 from Atlanta-based Pantom Equity Partners, is a provider of outsourced services to telecom and electric utilities. Track’s services include aerial telecom, underground telecom, overhead electric, underground electric, joint utility trenching, and directional drilling. The company serves customers primarily in Idaho, Montana, Wyoming, Washington, and Oregon. Track is headquartered west of Boise in Meridian, ID and has six additional regional offices across the Northwest (www.trackutilitiesllc.com).

According to CIVC, the combination of Track and Sitewise creates a platform with revenue of nearly $100 million, approximately 600 employees, and operations across seven states. Sitewise adds natural gas services to Track’s existing telecom and electric power capabilities, and provides end-market, customer, and geographic diversification.

“Sitewise is a perfect complement to our business and significantly expands our capabilities, enabling us to better meet the long-term infrastructure requirements that are driving demand in the telecom, electric, and natural gas end-markets,” said Jim Baumgardner, CEO and Chairman of Track.

CIVC invests from $15 million to $85 million in middle-market companies that have at least $5 million of EBITDA.  Sectors of interest include business services and financial services. CIVC currently manages over $1.5 billion in capital and is investing out of CIVC Partners Fund IV and Fund V. The firm is based in Chicago (www.civc.com).

CIVC continues to seek utility services companies in the telecom, electric power, and natural gas industries that would expand Tracks’ geographic footprint and service capabilities.

Partner John Compall and Principal J.D. Wright led the transaction for CIVC.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-29-16

Leonard Green to Buy ExamWorks

by

Leonard Green & Partners has entered into an agreement to acquire publicly-traded ExamWorks Group, a provider of independent medical examinations, for $2.2 billion. The transaction is expected to close in the third quarter of 2016.

ExamWorks provides independent medical examinations, peer reviews, bill reviews, Medicare compliance services, case management services, record retrieval services, and document management services to property and casualty insurance carriers, law firms, third-party claim administrators and government agencies. ExamWorks’ customers use these services to confirm the accuracy of claims made by sick or injured individuals under workers’ compensation, automotive, personal injury liability and disability insurance coverage. ExamWorks is headquartered in Atlanta (www.examworks.com).

“We are excited to partner with ExamWorks’ management team and organization,” said John Baumer, Senior Partner of Leonard Green. “We fully support the company’s commitment to its clients and look forward to the next phase of the company’s growth.”

Leonard Green invests in middle-market companies in the retail, distribution, healthcare, aerospace/defense, and consumer/business services sectors. The firm was founded in 1989 and manages approximately $15 billion of equity capital. Leonard Green is headquartered in Los Angeles (www.leonardgreen.com).

Fully committed debt financing is being provided by BofA Merrill Lynch (www.bofaml.com), Barclays (www.barclays.co.uk) and Deutsche Bank (www.db.com).

Goldman, Sachs & Co. (www.gs.com) and Evercore Group (www.evercore.com) are serving as financial advisors to ExamWorks. Paul Hastings (www.paulhastings.com) is serving as legal advisor to ExamWorks.  Latham & Watkins (www.lw.com) is serving as legal advisor to Leonard Green.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-29-16

Arsenal Continues Chemical Buys

by

Polymer Solutions Group, a portfolio company of Arsenal Capital Partners, has acquired Sasco Chemical Group, a maker of specialty chemicals for the rubber, wood, consumer and medical industries.

Sasco Chemical is a manufacturer of rubber anti-tack agents. Anti-tack agents are materials designed to eliminate the self-adhesive quality of rubber products and are applied to products to form a thin protective anti-tacky layer on the surface. Company owned brand names include PolyCoat, TechKote and Sasco Cote.  Sasco is headquartered in Albany, GA with a research and development center in Macon, GA (www.sascochemical.com).

Polymer Solutions Group (PSG) was formed by Arsenal in June 2015 when the firm acquired Peach State Labs, a provider of specialty polymers and performance chemicals. In February 2016, PSG acquired Flow Polymers, a manufacturer of chemical dispersions, process aids and homogenizing agents used in the tire, automotive, industrial products, wire and cable, and plastics markets. Chemical dispersions and agents are used by manufacturers to shorten the processing time and temperatures of thermoplastic resins such as polypropylene, polyethylene, polystyrene, ABS and nylon. PSG is led by president and CEO Mike Ivany and is headquartered northwest of Atlanta in Rome, GA with an additional facility in Dalton, GA (www.peachstatelabs.com) (www.flowpolymers.com).

Sasco Chemical was founded in 1948 by Ernst Skalla. In 2009, Marc Skalla and his brother Rusty purchased the company from their father, Randy Skalla, becoming the third generation to own and operate the business. Today, Marc Skalla is the company’s president and Rusty Skalla is the chief operating officer. Both will remain actively involved in the operations of Sasco under PSG ownership.

“The acquisition of Sasco Chemical builds on PSG’s model of addressing unmet market needs through the development of differentiated technologies and services to solve customer needs. We will continue to pursue acquisition opportunities to expand the PSG platform in existing and new markets and broadening our capabilities to service our customers,” said Sal Gagliardo, an Operating Partner in Arsenal’s Specialty Industrials Group.

Twinbrook Capital (www.twincp.com) and Kayne Anderson (www.kaynecapital.com), PSG’s existing lenders, provided debt financing to support the acquisition of Sasco. PSG was advised by Kirkland & Ellis (www.kirkland.com).

Atlanta-based investment bank Genesis Capital (www.genesis-capital.com) was the financial advisor to Sasco Chemical.

© 2016 Private Equity Professional • Private Equity’s Leading News Magazine • 4-29-16